CTFE and FEC are taking full control of Queen’s Wharf Brisbane
Hong Kong investors Chow Tai Fook Enterprises and Far East Consortium will acquire the 50 percent interest they don’t already own in Star Entertainment’s Queen’s Wharf Brisbane complex, delivering a liquidity lifeline to the cash-strapped Aussie casino group.
CTFE, the private holding company of New World Development chairman Henry Cheng, and the Chiu family’s FEC will pay A$53 million ($33.4 million) in cash to Star, according to a Friday stock filing. The Hong Kong partners will round out the asset swap by handing back their 66.67 percent interest in two Gold Coast hotel projects.
Brisbane-based Star was expected to receive an initial tranche of A$35 million on Friday. The infusion comes two months after the ASX-listed group disclosed that its available cash fell 47 percent in the three months to 31 December, clouding its future as it faced an impending fine for breaches of counter-terrorism and anti-money-laundering laws.
“Each party must cooperate with the other and take all reasonable steps to satisfy or ensure the satisfaction of the conditions precedent and complete the proposed transaction in accordance with applicable legal and regulatory requirements,” FEC said in the filing. “The target completion date is 30 June 2025, with a final deadline of 30 November 2025, unless otherwise agreed in writing by The Star and the JV partners.”
Path to Viability
As part of the deal, Star will transfer three additional assets near Queen’s Wharf Brisbane to the Hong Kong investors: the Treasury Hotel, the Treasury Car Park and the group’s 50 percent interest in the Charlotte Street Car Park.
Henry Cheng is doubling down on Aussie casinos
Star also agreed to terminate its management contract for Queen’s Wharf Brisbane but continue as operator for a transitional period to the end of March 2026.
CEO Steve McCann called the transaction “an important milestone” that would contribute to providing a potential pathway towards financial viability for Star.
“Our team has worked hard to deliver The Star Brisbane and establish a new precinct for Brisbane,” McCann said in a release. “We are grateful for the efforts of all of our employees and we will work with our joint venture partners and the regulator to transition to a new casino operator in due course.”
He said the group would remain focused on the remediation of the business and restoring its reputation as a suitable licensee at The Star Gold Coast and The Star Sydney.
New World Disordered
Chow Tai Fook is upping its bet on Star amid turmoil at New World Development, whose HKEX-listed shares are down almost 20 percent since a November announcement that the builder was naming a new CEO for the second time in just over two months.
Third-generation scion Adrian Cheng had stepped down as chief executive in September after New World posted its first full-year loss in two decades. Cheng’s successor in the role, Eric Ma, resigned in late November and was replaced by New World China Land CEO Echo Huang.
Bloomberg reported in December that the Cheng family’s infrastructure arm was seeking to sell toll roads in mainland China worth about $2 billion. That news came one month after New World disclosed plans to sell its entire interest in a sports complex at the former Kai Tak Airport site to Chow Tai Fook for HK$416.7 million ($53.5 million).
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